GM Increases Truck Production. Or Not.
Despite looking at a half-sized Q1 production plan, GM says it will bump truck production in the month of March. Production will be restored and escalated in March at GM’s Flint and Arlington truck plants, meaning there will be more Silverado, Sierra, Tahoe, Yukon and Escalade models. So, uh, why? “As far as our 2008 and 2009 mix goes, we’re significantly down on 2008 models, where most of our competitors have a lot of 2008 to get rid of. So anticipating a spring selling season, we’d like to increase our 2009 inventory,” GM’s Pete Ternes tells Automotive News [sub]. GM’s truck inventory has dropped noticeably, from a 122-day supply on December 1. But with 90 days of light truck supply, there’s still no real reason to increase production. Most industry-watchers consider a 60-day supply ideal. So what’s up?
Theory One: GM is making dealers take on more inventory in order to qualify for incentive cash. Having long ago become addicted to cash on the hood and seasonal blowout sales, The General’s binge-and-purge production model is just business as usual in Detroit.
Theory Two: This is production vaporware: a play at creating feel-good vibes for GM’s most important “customer” of all: the United States Congress.
More by Edward Niedermeyer